According to a recent Gallup poll, 46% of Americans do not own stocks or stock-related investments, such as mutual funds.¹
Individuals may give various reasons for not investing, but with important long-term financial goals, such as income or retirement, the reasons may not be good enough.
Why Should You Invest?
1. Make your money work for you
You might not have millions of dollars to invest, but that doesn’t mean your money can’t work for you. You open the opportunity to share in the same growth opportunities available to others because when you work hard for your money, wouldn’t it be great if your money works hard for you?
2. Achieve Independence, Security, and Self-Determination
When building wealth, you may be in a better position to pursue the lifestyle you want. Your life can become one of the possibilities rather than one of the limitations.
3. Leave a Meaningful Legacy to Your Loved ones
The assets and wealth you pass to the next generation can profoundly impact your heirs, provide security, educational opportunities, and initial capital to start a business, buy a home or provide financial support to your family or grandchildren.
4. Support Causes that are Important to You
Wealth can be an essential tool for impacting the community or even the world purposefully. What passions or impact do you want to make from environmental to the arts, human welfare, or positively impacting your community or the world.
A Framework for Saving & Investing
The decision and your choice to invest are an acknowledgment that it comes with certain risks, and it is important to have the awareness and focus on the long term goals. Knowing not all investments will produce the results desired, and some might even lose money. If you go in without risk, there could be little to no opportunity to potentially earn a higher return, which can help grow your wealth.
Thus, consider creating and maintaining a broad diversification for your investments, which reflect your risk tolerance, time horizon, and financial goals.
Since investing can be complicated, consider working with a financial professional to guide and consult you on your wealth-building journey.
1. Gallup.com , May 24, 2017
2. Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline.